October 10th Market Plunge

[MoneyChic]

Today the DOW dropped 832 points (-3.15%), S&P 500 fell 3.29%.
What do you all think- one-day blip, or signs of something longer- term?

I’m sitting on about $125k that I was DCAing over the next several months. Today’s big drop has me itching to go ahead and invest another chunk of it tomorrow, but then another part of me thinks this downward trend may last a while longer so I should stick to my original plan.....

I know the whole point of DCA is to stick to a strategy so as to lessen the chance of failing attempts of “timing the market” and to take the emotion out of investing. But when you have a big drop like today, it’s hard not to pay attention...

 

[audreyh1]

Isn’t this like the 10 year anniversary of the 2008 market plunge? Or was that on the 9th?

Yep, 10 year anniversary

The Dow would plummet 3,600 points from the September 19, 2008, intraday high of 11,483 to the October 10, 2008, intraday low of 7,882.

Wikipedia

 

[mickeyd]

Buying opportunity?

 

[Fedup]

I would like more drop. I mean get it over soon and fast.

 

[Montecfo]

I nibbled on a few of my favorite long-term growth names.

 

[Lakewood90712]

Normal markets have pullbacks, and this isn't even a ripple in the pond. Interest rates reverting to normal levels can cause these things. I would not consider even a 20% pullback as a big event considering how the markets have risen.

The two old guys who head Berkshire Hathaway have often opined that anyone who is uncomfortable with the market dropping 50% and not recovering for 10 years has no business buying equities. That would include equity mutual funds. Kind of extreme views, but I think these guys know what they are talking about.

I would not be comfortable with my money being off the cliff for ten years, so you can guess my current equity exposure. The last time I dove in to buy was 2009.

 

[DeborahB]

I am ignoring it. The market has dropped and recovered before. Good buying opportunity.

 

[easysurfer]

Was out running errands today so didn't see about the 800 pt drop til I got home.

I already did any rebalancing in Jan and don't plan on any more until Jan next year.

But may tune into one of the business channels tomorrow just for fun .

 

[MRG]

We have two threads on the topic:

Should they be merged?

http://www.early-retirement.org/forums/showthread.php?t=94149

 

[Fedup]

No, OP wants to know if she should DCA.

 

[MRG]

No, OP wants to know if she should DCA.

Thanks.

 

[stepford]

Heck, I guess this means I just automatically rebalanced to my target AA.

 

[ESRwannabe]

Today the DOW dropped 832 points (-3.15%), S&P 500 fell 3.29%.
What do you all think- one-day blip, or signs of something longer- term?

Interesting... I was too busy with work today to goof off. So I was completely oblivious to all the excitement. I will have to read up on it tonight.

My initial thoughts are.. "meh.. don't care".

A few months ago, I put most of my money 50/50 into two dividend focused index funds and so far this year the dividend growth has been fantastic.

VHDYX -- Vanguard High Div Yield Idx
VIHAX -- Vanguard International High Div Yield Idx

 

[ESRwannabe]

The two old guys who head Berkshire Hathaway have often opined that anyone who is uncomfortable with the market dropping 50% and not recovering for 10 years has no business buying equities.

Ten years is crazy talk if you are spread out globally and only plan to spend dividends, not capital gains. For 2008 it took like three years for dividends to recover on VHDYX. My expectation is that in most down turns dividends may take 1-3 years before they start to grow again.

 

[Lakewood90712]

Ten years is crazy talk if you are spread out globally and only plan to spend dividends, not capital gains. For 2008 it took like three years for dividends to recover on VHDYX. My expectation is that in most down turns dividends may take 1-3 years before they start to grow again.

That is longstanding advise from a man who is arguably the greatest investor of all time and echoed by his # 2 person (Charlie Munger) at Berkshire. I sure can't do it.

 

[Dtail]

So it gets me closer to my stock rebalance number for year end.

 

[flintnational]

I am 100% certain the market will drop more than 20%. I am just not certain when it will happen.

 

[IMATERP]

I bought some Disney and MSFT yesterday. They both went down today. Both will be much higher before I sell them.

I

 

[bobandsherry]

For every share sold off today, someone was on the other side buying. So someone thinks there's still value to be found.

 

[Franklin]

My stash took a nasty hit today but I am looking long term. After tomorrow we will have a better view and I am leaning towards investing more. Hang tough.

 

[NW-Bound]

For every share sold off today, someone was on the other side buying. So someone thinks there's still value to be found.

Yes. It must be those dirty timers who sold earlier 3 weeks ago when the S&P was at 2930, and they are now buying back at 2786, or 5% lower.

That 5% is twice my annual living expenses. Lucky bastards!

 

[SecondCor521]

I don't consider a 3% move to be a plunge as used in the thread title.

I tried to search for how often the market moves by 3%, but couldn't easily find that data. I'd guess it's rare but not particularly that rare - it looks like we've already had three this year. Since the Dow is in the 26K range, we're going to have to stop thinking that 800 points is a huge swing the way it would have been several years ago and start to look more at percentage changes - IMHO.

 

[corn18]

This might help put today in perspective:

 

[Midpack]

Yawn...

 

[audreyh1]

For every share sold off today, someone was on the other side buying. So someone thinks there's still value to be found.

But those someones don’t think those shares were nearly as valuable as yesterday!

And they might change their mind tomorrow!